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Technology-based gifts will definitely stock Santa's sleigh this holiday, but not only in the form of tablets, game consoles and gadgets. The most interesting tech trend this holiday season will be the growing use of electronic funds transfer, or EFT, to pay for everything from clothes to televisions to airplane tickets.

Common forms of EFT, such as PayPal and BillMeLater, which are both owned by
eBayebay -0.8812125484666902%eBay Inc.U.S.: NasdaqUSD28.12
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(ticker: EBAY), and
Google's
(GOOG) Wallet, are popular with online shoppers. But the most popular form of EFT—for gift buyers, recipients and merchants—is the prepaid gift card.

According to a National Federation of Retailers survey, U.S. shoppers intend to spend an average of $155.43 on gift cards this holiday season, up from $145.61 last year. The total gift-budget per shopper is expected to be around $516, down from $541 last year.

In the NFR survey, gift cards were the top choice among those on the receiving end: 57.7% said they prefer gift cards to any other presents this year. Clothing came in second at 50%; books, CDs and other media (including software) were third at 44.4%; and computers and consumer electronics were fourth at 35.4%. Respondents were allowed to check more than one answer.

Consumers like gift cards because they are convenient and offer the recipient choice, but retailers like them even more. Prepaid cards lock customers into spending at specific stores and Websites.

What's more, retailers love gift cards because they operate outside of the banking system, where credit-card processing costs are significantly higher. EFT processing incurs small, fixed-transaction costs for retailers as opposed to a percentage of the sale transaction, which is the case with credit cards.

On top of that, retailers get to keep unclaimed revenue from unused gift cards, although they must honor the cards for up to five years, which is good news, given the number of $5 Cold Stone Creamery cards on my refrigerator door that my kids have yet to use.

Most retailers outsource their gift-card operations to third-party processors, such as First Data, Ceridian Stored Value Solutions, and
Safeway
(SWY). These companies tend to function more like IT operations than financial institutions because they control databases of information as opposed to cash.

The revenue is generally held by the retailer—who receives it right away but can't recognize it until a card is actually used. And not unlike other areas of technology, EFT technology is embroiled in patent warfare.

In recent months, the gift-card industry has scored a number of patent victories against nonpracticing entities, commonly known as "patent trolls." These companies typically acquire patents and attempt to collect royalties and licensing fees.

Shares of one so-called troll,
Card Activation Technologies
(CDVT), got whacked in July when a Federal court in Delaware ruled its patents invalid. Alan Fisch of Kaye Scholer in Washington represented the plaintiff, Ceridian. Card Activation has also been tangled in litigation with Macy's, Nordstrom, Barnes & Noble and others. Fisch doesn't expect gift-card patent battles to wane anytime soon. "Successful technologies attract patent litigation, which will remain a constant for some time," he says.